MercoPress. South Atlantic News Agency

Argentine Breaking News.

Headlines:
Duhalde abandons politics or becomes arbitrator?; Kirchner's popularity remains strong. Argentine economy booming. Unemployment stands at 16,3%. Support for Patagonian coal mines. Patagonia Stock Exchange.

Duhalde abandons politics or becomes arbitrator?

Former Argentine caretaker president and recently posted president of the Mercosur Representatives Committee Eduardo Duhalde announced this weekend that he's definitively abandoning domestic politics and will concentrate in helping current president Nestor Kirchner and the governor of Buenos Aires province, Felipe Solá. "I'm leaving politics, it's over for me, and I've had enough. I don't want to have to leave politics abruptly. I've resigned to all my posts as promised. My sole purpose now is to help Felipe Solá and president Kirchner, which is where I can help and be useful", said Mr. Duhalde in a long interview with one of Buenos Aires Sunday dailies. Mr. Duhalde once again praised president Kirchner whom he sponsored with the strong backing of the province of Buenos Aires in last May 25 presidential election. "We all have negative and positive personality aspects, but the positive ones in him are far superior to other sides of his character", underlined Mr. Duhalde. Looking back to the May 25 election Mr. Duhalde said that the alternative to "progressive" Kirchner was right of centre candidate Ricardo López Murphy and "this would have condemned Argentina to a third chapter of the same style of government submissive to the dictates of the international credit organizations. The situation would have deteriorated dramatically". Mr. Duhalde's new job is to promote the integration of Mercosur, (Argentina, Brazil, Paraguay and Uruguay) and the block's relation with the rest of the world. He recently spent a week visiting Middle East and Arab countries with Brazilian president Lula da Silva and a business delegation. "Whoever is not willing to change doesn't understand politics and is a fool. Looking at your own navel is over. The problem is not so much the political leaders but the people. Whoever is not willing to change doesn't understand today's Argentina. I'm for change and the new. I'm for Kirchner and the new people, I'm convinced of it. That is how the country will change", indicated Mr. Duhalde. But in spite of the impact of his words, Argentine analysts believe it's difficult to see Mr. Duhalde leaving domestic politics. As the powerful undisputed political leader of the province of Buenos Aires he was the crucial support of former president Carlos Menem and the constitutional reform that enabled presidential re-election and ten years for his former ally. As caretaker president after the collapse of Mr. De la Rúa's administration he opened the way for an unknown Patagonian governor, Mr. Kirchner. And now following on his won words he will be working for Mr. Solá and Mr. Kirchner, both front line candidates for the 2007 Argentine presidential election. It sounds more as the wise man of Mercosur and arbitrator of Argentine politics.

Kirchner's popularity remains strong.

Even when the assessment of Argentine President Nestor Kirchner's administration dropped from 73% to 51,8% between July and November, his personal standing remains very strong and close to 77%. According to a Ipsos Mora & Araujo public opinion poll published this Sunday in the Buenos Aires press in June 2003 the administration's support was 73% and has since been eroding to reach 51,8% in November. However Mr. Kirchner or the "K factor" is still particularly strong, 77%, seven months after taking office last May 25. As to economic conditions in the coming year, 41% of those interviewed were optimistic anticipating an improvement, 44% believe things will remain unchanged and 11% feel that the Argentine economy will not deliver. As to the overall prospects for Argentina in 2004, a majority of Argentines, 51%, are positive about the future, eight points above the record established when former president Fernando De la Rúa took office in December 1999. Mr. De la Rúa, however given the deterioration of the political, social and financial conditions of Argentina finally resigned two years later in December 2001. Negative expectations, 8,5%, are also a record,?low. Between the end of 2001 during the crisis that toppled Mr. De la Rúa and his replacement by caretaker president Eduardo Duhalde, and mid 2002, negative expectations in Argentina ranged 50%.

Argentine economy booming.

According to official statistics the Argentine economy is rapidly recovering and is expected to expand above 7,5% in 2003, after having reached 8,5% in the first ten months with September and October consolidating above 10% compared to 2002. This push effect should also help the Argentine economy grow at least 6% in 2004. The Argentine Census and Statistics Office adds that in the third quarter the economy grew 7,7% compared to the same period in 2002, and 2,8% above the previous quarter. Looking closely at the third Q, goods production expanded 15,9% compared to a year ago, while services registered a modest 4,8%. Among the first, construction expanded 40,3%; manufacturing 16,9%; electricity, gas and water 9,5%; fisheries 6,3% and farming 3,8%. Regarding services, financial intermediation activities actually dropped 16,8%; however retailing grew 16,8% and transport and communications 9,3%. Private consumption increased 10,4% during the third Q; gross domestic investment 42,7%, exports 4,3% while imports ballooned 46,7%. Expansive fiscal and salary policies helped boost "domestic demand, private consumption and investment", argues economist Miguel Angel Broda. The Argentine economy is responding as in similar cases when countries undergo a dramatic drop in GDP, with industry recovering first followed later by commerce and retailing, added Mr. Broda. October was the eleventh consecutive month of expansion. Before that Argentina experienced 18 months of continuous erosion. However Argentine analysts warn that great challenges are awaiting in the coming twelve months: the federal co-participation bill (revenue sharing with provincial governments); restructuring of the gigantic foreign debt and renegotiation of contracts with the public utilities companies.

Unemployment stands at 16,3%.

In spite of the strong recovery unemployment in Argentina remains high with two different percentages, 14,3% and 16,3%, according to the old and new methodology applied. President Nestor Kirchner anticipated the figures that will be officially announced this week. However in either case, unemployment is falling and the number of jobs created has increased. Apparently the new methodology that reveals a higher unemployment than the old system includes a greater range of work options and will be published quarterly instead of twice a year, making it easier to follow the evolution of the labour market. With the new measuring system 16,3% of the Argentine workforce is out of a job or looking for one, which is equivalent to 2,6 million people. The Argentine Industry Confederation also confirmed the creation of more jobs, "which is easily verifiable not only statistically but with industrial production".

Support for Patagonian coal mines.

The Argentine Ministry of Infrastructure and Planning announced a three years investment program for the Río Turbio coal mines in Santa Cruz province, close to the Chilean border. The funds involved are 3,2 million US dollars and will actually be invested in the first company that returns to government management after having been privatized under the administration of former president Carlos Menem. "What has been announced is a long term plan which ensures the continuation of coal extraction, as is the wish of President Kirchner", said Eduardo Arnold who heads the company since 2002 when the government moved in again. Río Turbio mines between 1994 and 2002 were managed privately who nevertheless received an annual subsidy equivalent to 22,5 million US dollars plus a subsidized price for the coal shipped to thermoelectric generating plant in San Nicolás. Currently the mines receive annually 1,5 million US dollars to help pay the salaries of 1,100 mine workers and staff. In 2003 Río Turbio mines exported 40,000 tons of coal, quiet distant from record years of 400,000 annual tons.

Patagonia Stock Exchange

Businessmen from the Argentine Patagonia provinces of Tierra del Fuego, Santa Cruz and Chubut are in the process of creating a regional Stock Exchange with the purpose of helping small and medium companies access to credit to fund expansion plans. "We've always argued the need of four regional stock exchanges. There are already three, Rosario, Cordoba and Mendoza, and we are convinced of an additional one in Patagonia", indicated Diego Lo Tártaro president of the Institute for the Development of Regional Economies, IADER. The Patagonia Stock Exchange project presided by former Tierra del Fuego governor Adolfo Sciurano Castañeda is an initiative started by Patagonian businessmen, chambers of commerce and professionals organizations. The new Stock Exchange should be operational next April and will be launched with an initial number of ten to fifteen companies. "We have to end with the myth that stock exchanges are only for big companies. In Argentina until the sixties over 600 companies operated in the stock exchange, mostly medium sized", said Mr. Lo Tártaro who also admitted that the two other Patagonian districts, Neuquen and Rio Negro "have greater affinity with Mendoza and Buenos Aires because of geographic reasons". The turnover of the Patagonian Stock Exchange for the first year is estimated between the equivalent of 100,000 and five million US dollars. Argentina's main stock market in Buenos Aires has a daily turnover of 17 million US dollars. "The incredible development of international tourism in the region, as well as fisheries, wool, forestry, mining, oil and gas make Patagonia a pole of incalculable potential", stressed Mr. Lo Tártaro. Since former governor of Santa Cruz, Nestor Kirchner became president of Argentina Patagonia has received a strong boost amid growing press coverage.